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A Home-Based Business Online
_______________________________________________________________
Practical home business ideas, opportunities
and solutions for the work-from-home
entrepreneur
Issue 134 : May 27, 2002
Sent to 13,219 Opt-In Subscribers
Editor: Elena Fawkner
Publisher: Fawkner Publishing
http://www.ahbbo.com
Contact By Email
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IN THIS ISSUE
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1. Welcome and Update from Elena
2. Home Business Idea of the Week
3. Feature Article - Flushing Out Frauds
4. Surveys and Trends
5. Success Quote of the Week
6. Advertise with AHBBO
7. Subscription Management
8. Caveat Emptor
9. Contact Information
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1. Welcome and Update from Elena
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Hello again and a warm welcome to all the new subscribers
who have joined us since the last issue.
This week's article is all about how to carry out effective
due diligence when evaluating a business opportunity. It's
easy to spot a fraud when he has your money, it's quite
another to spot him BEFORE you open your wallet. "Flushing
Out Frauds" is a step by step approach to evaluating any
business opportunity. It's at segment 3.
As always, thanks for reading and I hope you enjoy this week's
issue.
Remember, AHBBO is for YOU! If you have comments or
suggestions for topics you would like to see addressed, or
would just like to share your experiences with other
subscribers, I want to hear from you. Please send
comments, questions and stories to Contact By Email .
_______________________________________________________________
2. Home Business Idea of the Week - Picture Framing
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This business can be started and operated within the comforts
of home surroundings. You can start on a sturdy table or solid
work bench in a small storage area, such as your garage, shed
or basement; even a small room can be devoted toward this
purpose.
Many wood mouldings can be bought at reasonable cost from
lumber yards and can be used as the basic product for
manufacturing frames. Everyone has photos and prized
possessions which need framing. Many people don't like the
plastic frames found in stores, thus creating a ready market
for beautiful, natural wood frames.
Quite often you can find old, beautiful, rugged picture frames
at rummage or garage sales. They can be repaired and cut
down to requirements. Good frames can add substantially to
the value of art, paintings, posters, certificates, etc. The list
is endless.
No matter where you live you can start a picture framing
business. To some, it can be an exciting and fascinating trade.
With just a little experience and proper tools you can also learn
to cut your own glass for the frames.
Your local library will be a great source of information on the
subject.
Check out your local variety stores and others that handle
picture frames and get ideas from what they have to offer.
There are many variations and you will certainly be able to
come up with your own different and better designs.
-----
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3. Feature Article: Flushing Out Frauds
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© 2002 Elena Fawkner
"... ALWAYS carry out your own due diligence! Remember,
if it sounds too good to be true, it probably is."
Regular readers will recognize the above language. It comes
from the "Caveat Emptor" section which appears towards the
end of each issue of A Home-Based Business Online.
Good advice to be sure (even if I do say so myself). But
what does "due diligence" mean and how do you do it?
Basically, it means to be diligent in researching your proposed
business opportunity so you can be as sure as you can be
what you're getting into and why.
All very well and good, but how do you actually do it
effectively?
Stock-standard advice includes:
1. Check with the BBB about whether your opportunity
has any complaints filed against it.
2. Do a Dun & Bradstreet search to find out about its
credit history.
3. Check business references.
4. If practical, visit the place of business.
Only one problem with this approach. Although it's a good
start for researching a legitimate opportunity, it won't flush
out a fraudulent one.
A newly formed company won't have any complaints filed
against it with the BBB. D&B won't be much help since scam
artists will generally keep their trade creditors in good
standing until immediately before they pull up stakes and
vanish into the night. Business references are invariably
nothing but shills (associates of the scammer paid for their
recommendation services). And few potential purchasers
living in New York are likely to travel to California just to
lay eyes on the so-called corporate headquarters of their
opportunity. Even if they do, a serviced office gives just
the right professional impression.
So, how do you flush out a fraudulent business opportunity?
Well, there's a hard way and there's an easy way. The
hard way (which is oh so easy at the time) is to fork over
your money and then watch as it flies away. The easy way
(which is oh so difficult at the time, at least compared to
just handing over your money) is to use your state's and/or
the FTC's disclosure laws for business opportunities (if
available) and then methodically work through the information
available to you until you have enough information to make an
intelligent decision.
There are 23 states in the United States with business
opportunity laws on their books. Most prohibit sales of business
opportunities unless the seller gives prospective purchasers
disclosure documentation that has been filed with the state.
The 23 states are: California, Connecticut, Florida, Georgia,
Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland,
Michigan, Minnesota, Nebraska, New Hampshire, North Carolina,
Ohio, Oklahoma, South Carolina, South Dakota, Texas, Utah,
Virginia and Washington. (See
http://www.ftc.gov/bcp/franchise/netbusop.htm for links
to more information.)
In addition, if the business opportunity falls within the
definition of a franchise or is a vending machine or display rack
opportunity, the FTC's Franchise & Business Opportunity Rule
mandates detailed disclosures such as identifying information
about the franchisor (the person offering the business
opportunity), the franchisor's business experience, litigation
history, bankruptcy history, initial funds required, recurring
funds required, financial information about the franchisor and
much more . A franchise is defined broadly and just because
it's not referred to as a franchise doesn't mean it isn't. See
http://www.ftc.gov/bcp/franchise/16cfr436.htm for the full
text of the Rule.
The point of all of this is that many, perhaps most, opportunities
you'll come across will either fall within the FTC's definition of
a franchise and thereby trigger the federal disclosure
requirements (or, if the franchise offer is made in California,
Illinois, Indiana, Maryland, Michigan, Minnesota, New York,
North Dakota, Oregon, Rhode Island, South Dakota,
Washington or Wisconsin, state franchise disclosure
requirements) or, if not technically a franchise, the opportunity
may very well fall within the scope of the state business
opportunity disclosure laws of the 23 states listed earlier.
So, when considering a particular business opportunity, take
this approach:
1. Determine whether it is being offered in one of the
13 states with franchise disclosure laws. If so, determine
whether the opportunity is a franchise as defined under the
state's law. If so, check whether the state requires the
disclosure document to be filed with the state. If so, check
whether it has been. If not, assume the opportunity's a fraud
until proven otherwise. If the state in question doesn't require
the disclosure document to be filed with the state and you're
not provided with such a document from the company when
you ask for it, assume the opportunity is a fraud until proven
otherwise.
2. If the opportunity is not being offered in one of these 13
states, determine whether it falls within the definition of
a franchise under the FTC's Franchise & Business Opportunity
Rule. If so, check whether a disclosure document has been
filed with the FTC. If not, assume the opportunity's a fraud
until proven otherwise.
3. If the opportunity doesn't fall within the federal or state
definitions of what constitutes a franchise, if it's being offered
in one of the states with business opportunity laws on its books
which requires disclosure documents to be filed with the state,
check that it has been. If not, assume the opportunity's a
fraud until proven otherwise. If the state doesn't require filing,
and the company doesn't provide you with a disclosure
document when you ask for one, again assume the opportunity's
a fraud until proven otherwise.
Also, bear in mind that just because your state may not have
business opportunity disclosure laws, other states do. Many
business opportunities are offered nationally. Where that's the
case, make enquiries of the states that do have business
opportunity disclosure laws to see if the company has complied.
If it has, that should provide some comfort (all other things
being equal).
The above approach is kind of an initial disqualifying round. If
the opportunity is required to provide some form of disclosure
and fails to do so, that's a big red flag.
Of course, just because you receive the disclosure document
doesn't necessarily mean that this is a good business
opportunity for you. All it does is (theoretically) provide you
with enough information from which you can make your
determination. At the end of the day, you must still exercise
your own good judgment.
There are still going to be situations where a disclosure
document is not required to be provided though, simply because
the opportunity is not a franchise and it's not being offered in a
state that has business opportunity disclosure laws.
So, here's a 10-point checklist of things to do and check when
you have nothing else to rely on. In fact, they're a good idea
even if you do have a disclosure document to review. Any
inconsistency between the disclosure document and your own
investigations gives you another question to ask.
1. Check with the BBB in the city in which the company is
based. Although no complaints don't necessarily mean
anything, complaints that have been filed do.
2. Check with D&B. Again, although a good report doesn't
necessarily mean anything, a bad one does.
3. Check with the Chamber of Commerce in the city in which
the company is based. Whether the company is a member or
not doesn't mean anything but you can still ask about their
reputation or whether there's any reason why someone
shouldn't do business with them.
4. Check with your state's Attorney General's office and
Secretary of State for any complaints or pending
investigations.
5. Ask for a list of references of previous local purchasers
including name, address, telephone number and when they
entered into the opportunity. Make it clear that you want
a list of people you can meet face to face. If the company
is reluctant to provide this, be suspicious.
6. If your opportunity is being presented on a web site,
check to make sure there is a physical address (not just
a post office box) and contact telephone numbers. And
check them out.
7. Look carefully at the business experience of the
management behind your opportunity. If they leave a trail of
short-term ventures in their wake this could be a sign they're
either not particularly good at what they do or they have to
move on frequently (if you get my drift). Also, look for
specifics - names, dates, places. Vague statements like "10
years experience in the widget industry" are meaningless. Ask
for details. Who, what, when, where and why (did you leave?).
8. Beware vague, generalized or evasive answers to due
diligence questions that require simple factual answers. You
want to hear "123 Main Street, Suite 405, Your Town" in
response to the question, "What is your corporate address?".
If you get a "Why do you want to know?" instead, move on.
9. Beware policies that require payment for product and/or
supplies by check or money order only. By not accepting credit
cards, the ability dispute charges for defective or non-existent
product is eliminated.
10. Most important of all, trust your gut instinct. If it all just
sounds too good to be true, it probably is.
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** Reprinting of this article is welcome! **
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------
Elena Fawkner is editor of A Home-Based Business Online ...
practical business ideas, opportunities and solutions for the
work-from-home entrepreneur.
http://www.ahbbo.com
_______________________________________________________________
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4. Surveys and Trends
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© 2002 Ryanna's Hope
=> HEALTH PRODUCT REALITIES
ARE YOU WORKING ON YOUR CREDIBILITY?
A survey by Gomez Advisors found the plethora of health-
related content online may be one of the biggest
disadvantages. As of today, there are close to 20,000
health sites on the Internet and more than a dozen full-
service online drugstores," said David Steele. M.D., senior
healthcare analyst at Gomez.
"This number continues to grow at an alarming rate, leaving
consumers overwhelmed with the abundance of information
out there and inundated with e-health options."
Of the 12,000-plus individuals surveyed by Gomez, 77
percent indicated they have previously searched online for
health information. But 30 percent of the consumers were
indifferent when asked which health site they would use if
restricted to only one -- indicating a wide open marketing
opportunity.
The Gomez survey also found the top motivation driving
consumers to access health information online is when a
loved one was diagnosed with a medical condition, indicating
the majority of health information seekers go online to help
others. The findings also suggest the majority of these online
consumers are most concerned with the credibility of health
information on the Internet and the trustworthiness of a site.
In fact, 85 percent rated high credibility as the single most
important attribute when selecting a health site.
=========================
Advertising Time Line...
TRYING TO FOOL THEM WITH PHOTOS
Even advertising couldn't sell a car the public didn't want.
When Ford promoted the Edsel with photo-lengthened
pictures to make it look more glamorous, in reality, it looked
simply ordinary and became the butt of many jokes.
=========================
=> CONSUMERS MAY NOT BE INTERESTED IN YOUR NEW IDEA
TO CHARGE!
A new research report from Jupiter Media Metrix says
consumers are even less interested in forking over money for
online services than they are paying for content online.
The tech and Internet measurement firm polled a test sample
of 2,097 consumers about their attitudes about what they
would pay for online. The results show 69 percent were
resistant about signing up for paid services online, which is
more than the resistance to paying for content it found among
63 percent of a prior poll sample. More than two-thirds of
those in the survey would not be willing to pay for any services
on the Internet, including enhanced e-mail, instant messaging
or file-sharing capabilities.
And as the music industry lines up behind efforts to offer paid
music subscription services online, the Jupiter research is
likely to confirm what they expected: the migration to
customers paying for services online will take a lot longer than
originally thought.
But people are paying. Despite the resistance it found in the
poll sample, Jupiter also says it expects revenues from online
games and digital music will reach an estimated $1.8 billion and
$1.7 billion by 2006, respectively (up from $260 million and $30
million in 2001).
=> EMAIL ADS - SPAM AND SATURATION
Based on a survey by Executive Consulting of more than 1,200
e-mail users, the study found that spam makes up the largest
share of most users' mailboxes. For those who use e-mail
primarily at home, unwanted e-mail marketing messages
comprise about 37 percent of users' mailboxes — more than
personal correspondence (26 percent) or permission-based
mailings (24 percent).
For users of e-mail at both home and work, spam tops even
job-related mail by 3 percent, making up 28 percent of users'
average inboxes.
Saturation, too, plays a major role in turning consumers off
e-mail as a communication channel. Seventy percent of
respondents said they felt they received more e-mail this year
than last, with 74 percent of that figure saying that increases
in spam volume are a major factor.
Additionally, two-thirds of the respondents said they feel they
get "too much" e-mail. About 51 percent of those say they are
likely to "occasionally" respond to marketing mailings, or 7
percent less than the sample total. As a result, consumers who
feel inundated by e-mail are less likely to respond to messages
— even if they've opted-in.
=> WHAT ARE THE ODDS THEY'LL EVEN LOOK AT YOU?
While challenges loom, e-mail marketing remains a major
opportunity for marketers, since consumers — for the present,
at least — continue to accept and act on advertising messages,
according to Executive's study, above.
About 62 percent of the survey's respondents said they would
be "curious" or "eager" to read permission-based e-mail
messages, while mail from an unrecognized marketer would elicit
such responses only 13 percent of the time. Instead, 52 percent
of the survey's respondents said they'd delete mail from unknown
senders without reading, while an additional 21 percent said they
would consider opening the e-mail, but would likely be annoyed.
The study also indicated that marketers who had maintained
opt-in e-mail practices the longest were likely to have the most
responsive customers. For e-mail users who have maintained
opt-in relationships with companies for more than 3 years, 61
percent said they believe mailings sometimes affected their
purchasing decisions, 13 percent greater than those with
shorter relationships.
Additionally, most consumers don't view opt-in e-mail as part
of "the saturation problem," with most respondents pointing to
increasing amounts of personal e-mail and spam as being
nearly two and three times more responsible for cluttering up
their inboxes.
The research comes as marketers are scrambling to deal with
the problem of too much mail — especially unwanted mail —
competing for users' attention. Groups including the Direct
Marketing Association have released guidelines for "best
practices" for marketers, in an effort to make e-mail more
effective, while a host of industry players — including
DoubleClick, Microsoft and Omnicom's RappCollins — have
signed on to test a new TRUSTe seal for e-mail. The program
aims to boost response rates by guaranteeing that e-mail
messages are sent from legitimate marketers rather than
spammers.
------
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5. Success Quote of the Week
_______________________________________________________________
The path to accelerating and enjoying the learning process
requires us to see success and failure as equally instructive
and valuable.
-- Michael Gelb and Tony Buzan
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7. Subscription Management
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8. Caveat Emptor
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Although all of the information presented in AHBBO is
published in good faith, I accept no responsibility as to the
accuracy or otherwise of the information presented. By making
use of the information contained in AHBBO the reader assumes
all risk that certain information may prove to be incorrect.
**I do not endorse any advertisements unless stated to the
contrary. Your money, your decision, your responsibility.**
All advertisements are accepted in good faith. However,
advertisers are solely responsible for the content and
accuracy of their classified advertisements and I give no
warranties, nor accept any responsibility, in relation to any
classified advertisement appearing in this publication. ALWAYS
carry out your own due diligence! Remember, if it sounds too
good to be true, it probably is.
_______________________________________________________________
9. Contact Information
_______________________________________________________________
Elena Fawkner, Editor
A Home-Based Business Online
Contact By Email
http://www.ahbbo.com
_______________________________________________________________
All Rights Reserved